The development of the Icelandic fisheries in the post-war era closely followed the path predicted for common property fisheries.

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Figure 1. Fishing capital and catch values
1945-1997Indices 1960100. Source National
Economic Institute

• The development of the Icelandic fisheries in the
  post-war era closely followed the path predicted
  for common property fisheries.
• They exhibit increasingly excessive fishing
  capital and effort compared to reproductive
  capacity of the fish stocks.
• Fishing capital increased by over 1200
• Real catch values only increased by 300
• Growth in fishing capital exceeded the increase
  in catch values by a factor of more than four.
• In 1983 the output-to-capital ratio in the
  fisheries was less than one-third of the
  output-to-capital ratio in 1945

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The Pelagic Fisheries

• Herring fishery
• TAC in the herring fishery in late 60s
• TAC did not halt the decline in the stocks
• A complete herring moratorium in 1972
• Herring fishery partly resumed inn 1975
• Vessel quota (IQ) system with limited eligibility
• Vessel quotas were small, issued for a single
  season at a time
• Transfers of quotas between vessels allowed in
  1979
• Various political decisions on entry and exit
  (eligibility) until 1986, ITSQs thereafter
• The Fisheries Management Act of 1990 made the
  vessel quota system in the herring fishery part
  of the general ITSQ system

• Capelin fishery
• Became important in the 1970s
• Vessel quotas in 1980, at a time when the stock
  was seriously threatened with overfishing.
• The arguments were much the same as in the
  herring fishery previously
• The industry asked for limited entry into the
  capelin fishery and vessel quotas
• In 1986 capelin vessel quotas became transferable
• The capelin vessel quota system became a part of
  the general ITQ system with the adoption of the
  Fisheries Management Act of 1990

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Demersal Fisheries

• 200 mile exclusive fishing zone in 1976
• MRI recommends TAC for codfish
• TAC proved difficult to uphold
• Individual effort restrictions in 1977
• Limited allowed fishing days for each vessel
• New entry remained possible and the demersal
  fleet continued to grow
• Allowable fishing days had to be reduced from
  year to year.
• Deep-sea trawlers were allowed to fish for cod
  323 days in 1977
• In 1981 they were allowed 215 days
• This system was economically wasteful

• Sharp drop in the demersal stock and catch levels
  in 1983-84
• The Fisheries Association of Iceland proposes IQs
  in the demersal fisheries for 1984
• IQ system extended for 1985, 1986-1987, 1988-1990
• Vessels allowed to opt for effort restrictions,
  to ensure sufficient support
• In 1990 a comprehensive ITSQ legislation, the
  Fisheries Management Act
• This legislation abolished the effort quota
  option and closed certain other loopholes.
• Extended the ITQ system indefinitely

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The current ITQ Fisheries Management System

• The size of each vessels annual catch
  entitlement (ACE) in a specific fishery is a
  simple multiple of the TAC for that fishery and
  the vessels TAC share
• The ITSQ system was superimposed on an earlier
  management system
• The system involving certain gear, area and fish
  size restrictions is still largely in place.
• The ITSQ system has not replaced these components
  of the earlier fisheries management system
• The Fisheries Management Act of 1990 has been
  amended on several occasions (in 1992, 1994,
  1995, 1996, 1997, and 1998)

• System made fairly uniform across the various
  fisheries by the Fisheries Management Act of 1990
• Slight differences between the fisheries exist,
  mostly for historical reasons
• The fisheries management system is based on
  individual transferable share quotas (ITSQs) and
  fishing licences
• All fisheries are subject to vessel catch quotas
  15 species in Icelandic waters and 3 outside
• The quotas represent shares in the TAC
• They are permanent (indefinite), perfectly
  divisible and fairly freely transferable
• They are issued subject to a small annual charge
  to cover enforcement costs

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Table 1. Chronology of the Key Steps in the
Evolution of the ITSQ Management System

• 1975 The herring fishery Individual vessel
  quotas
• 1979 The herring fishery Vessel quotas made
  transferable
• 1980 The capelin industry Individual vessel
  quotas
• 1984 The demersal fisheries Individual
  transferable vessel quotas
• 1985 The demersal fisheries Effort quota option
  introduced
• 1986 The capelin fishery Vessel quotas made
  transferable
• 1988 Transferable vessel quotas in all fisheries.
  Effort quota option retained
• 1991 A complete uniform system of individual
  transferable share quotas in all fisheries for
  all vessels over 6 GRT

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Performance of the ITSQ SystemPelagic Fisheries

• Figure 3. The Development of the Pelagic Fishery
  1977-1997
• Max. no. of active purse seine vessels in any one
  month
• ITQs in herring and capelin successful
• By 1993-1994 number of vessels declined by a
  third in each fishery
• Increasing catches
• Catch per unit effort in herring increased
  tenfold
• Herring stock in good condition
• Capelin stock more volatile do to natural factors
• Good profitability in capelin fishery

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Pelagic Fishery

• Figure 2. The Pelagic Fishery CPUF for the purse
  seine fleet
• Herring and capelin quotas combined on fewer
  vessels
• Pelagic fishery season extended
• Icelandic herring in Autumn
• Capelin in Winter
• Norse herring in early Summer
• Capelin in late Summer
• Many vessels have deep-sea shrimp quotas, also
  blue whiting in 1998
• Vessels changed for trawl fishing and on board
  processing

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Demersal Fisheries

• Figure 4. Demersal fishing effort and capital
  1978-1997
• Indices 1979100
• IQs in 1984
• Effort restrictions dominant in 1985-1990
• Vessels under 10 GRT exempt from quotas
• Investment in small boats
• Processor vessels
• Comprehensive ITSQ System since 1991
• Fishing effort decreased substantially
• Fishing capital growth halted, and from 1992
  decreased somewhat

Effort Restrictions
ITQ System
Effort Restrictions Dominant
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Figure 5. Total factor productivity in the
fisheries, at constant prices and adjusted for
stock size.Source Institute of Economics
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Table 2. Transfer of quota shares 1991-1998.
Percentage of total quota shares in each year
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Table 3. Transfers of quota between vessels
1992-1998.As percentage of total ACE
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Figure 6. Number of vessels with commercial
fishing permits 1992-1998

• Number of vessels with commercial permits 2,552
  in 1992/93
• Down to 1,695 in 1998
• In 1992 1,265 vessels larger than 6 GRT with TAC
  shares
• In 1998 798
• In 1992 1,125 vessels under 6 GRT engaged in
  hook and line fishing
• In 1998 808
• Inshore shrimp fisheries50 to 44, scallop
  fishery 21 to 15, and lobster fishery 57 to 42

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Figure 7. Cod catch in MT and as share of total
cod catch,vessels under 10 GRT
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Regions
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